EU axes geo-blocking: Upsets studios, delights consumers

Analysis The European Parliament has approved a draft law that geo-blocking, the act of offering an online content service in one European Union (EU) country and that country alone, will be scrapped in the first half of next year.

Coupled with the recent law to end mobile roaming charges in the EU as of next month, the OTT industry as a whole stands to flourish in Europe over the next few years. However, the losers here will be the content creators, which argue that the removal of geo-blocking will weaken the financial value of content, as well as the pay TV operators, as the ruling will trigger a small spate of cord cutting for consumers with two or more properties in multiple EU countries. But the move is also a hammer blow to content pirates.

Of course no one wants to upset US studios, but those in Hollywood have always limited distribution to a local country inside the EU, believing they can get more money by licensing movies exclusively in each territory. The other side of the argument believes distributing content evenly will lead to more jobs and economic growth. And those studios will have more customers but less exclusivity and they can always ensure exclusive rights in a particular language which solves the problem for Europe.

Axing geo-blocking is a significant decision in the broader plan to create a Digital Single Market, but the wider reaching effects of this initiative are still open for debate –spanning varying competition laws, overseas litigations, consumer protection, and piracy.

If the draft law passes the final stage by receiving sign off from the EU Council of Ministers, EU member states will be given nine months to roll out the ruling, when the Commission should release additional details on how it intends to go about the process of merging copyright laws.